By Michael Aneiro

The Labor Department’s latest employment figures show the U.S. added 146,000 jobs in November as the unemployment rate fell to 7.7%, while Hurricane Sandy apparently didn’t “substantively impact” either figure. All good news, right? Not to John Lonski, chief economist at Moody’s Capital Markets Research.

“Upon further review it was another lackluster reading for the labor market,” Lonski says. He points out that 77% of the month’s job gains came from relatively low-paying service sector industries while the drop in the unemployment rate was mostly due to people dropping out of the labor force.

Lonski notes that the U.S. household survey shows the percentage of employed people who are at least 55 years old hit a record-high 21.7% in November. “It’s off the charts,” Lonski says, and well above the 13.6% long term 20-year average prior to the financial crisis. “You have a problem here in that what you’re realizing in terms of employment growth is older workers, who have a lower propensity to consume than younger workers.”

On the plus side, Lonski says low wage growth should help contain inflation overall, and that the report looked strong enough to keep the Fed from thinking about expanding its quantitative easing program, at least until after the fiscal cliff issues get sorted out.

Given tepid economic conditions and all things fiscal cliff, Lonski says he’s surprised at how well the corporate bond market keeps holding up. “The economy is growing just rapidly enough to prevent an extended widening of corporate bond spreads, but slowly enough that investors will tolerate a narrowing of spreads to previous average levels.” Average junk bond spreads currently measure 548 basis points over Treasuries, about 100 basis points above their long-term average, and Lonski thinks investors will have a hard time accepting any move below 500 bps.

“One of the benefits of holding lower-rated debt at this point in the cycle is at least the spreads provide an offset to investors if Treasuries rise,” he says. ”In all likelihood you’re looking at a higher 10-year Treasury yield in a year, but I think you’re going to see yields remain relatively low.”